HSBC to pay £1.2billion over US money laundering

HSBC has agreed to pay a record $1.9billion (£1.2billion) settlement after admitting rogue states and drug cartels laundered money through its US division.

A US Senate investigation found the bank, Europe’s biggest by market value, had transferred billions of dollars on behalf of countries including Iran and Syria, as well as Mexican drug cartels.

HSBC group chief executive Stuart Gulliver said: ‘We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again.’

He added: ‘The HSBC of today is a fundamentally different organisation from the one that made those mistakes.

‘Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters.’

The bank, which said it had set aside $1.5billion to cover potential fines and settlements, is now unlikely to be prosecuted further under the Bank Secrecy Act and Trading with the Enemy Act as per previous cases involving US authorities and corporations.

HSBC compliance head David Bagley resigned over the affair when the banking group was accused of ignoring warnings and breaching safeguards.

After today’s announcement of its settlement with the US Department of Justice, HSBC is expected to come to an arrangement with the Financial Services Authority in the UK.

Fellow British bank Standard Chartered has recently agreed to pay a further $237million (£203million) over allegations it breached sanctions with Iran.

Standard Chartered has already paid $340million (£211million) to New York regulators after it was accused of exposing the US financial system to terror suspects and drug kingpins by concealing $250billion (£160billion) worth of transactions with Tehran.